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A Unique Kind of Not-for-Profit

November 1, 2014

Fraternal benefit society

Thrivent Financial is a not-for-profit membership organization. We're also a Fortune 500 financial services organization. How can this be?

We're actually a unique kind of not-for-profit called a fraternal benefit society.More Information By definition, a fraternal benefit society is a not-for-profit organization that provides insurance to its members and – this is key – has to carry out social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic or religious purposes for the benefit of its members and the public. So we can't simply sell insurance, and we can't simply do charitable work either. We have to do both.

Another key is that we have to operate under what's called the lodge system, which means a member of the "society" is a member of a local group of the society (which is self-governing). Other unique aspects: Fraternal benefit societies have representative governments (local and national boards elected by members), and members share a common bond that can be religious, ethnic, vocational or another common bond.

Why do we have fraternal benefit societies?

At the beginning of the 20th century, life insurance was a largely unfamiliar and unaffordable concept. Fraternal benefit societies were formed so people with a common bond – typically religious, ethnic or occupational – could help one another if tragedy struck. Fraternal benefit societies also provided opportunities for people to socialize and helped recent immigrants get used to life in America. Members belonged to local "lodges" or meeting places where they could come together as a community and celebrate their common bond.

For those who want the "official" language …

The IRS defines a fraternal benefit society as "one whose members have adopted the same or a very similar calling, avocation, or profession ... working in union to accomplish some worthy object." The IRS also notes that members of a fraternal band together as a society to "aid and assist one another and promote the common cause" and engage in activities of a "beneficial and fraternal character."

The American Fraternal Alliance (a trade group) defines it as a membership organization united around a unique common bond. And it must offer members fraternal benefits including insurance. The common bond of Thrivent Financial is Christianity.

To be exempt from income tax, a fraternal benefit society must also "operate under the lodge system," which means having its members belong to subordinate units that are "largely self-governing." In our case we call them chapters or Thrivent Member Networks.

A not-for-profit organization that provides insurance to its members and operates for social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic or religious purposes for the benefit of its members and the public. These organizations operate under the lodge system, which means a member of the society is a member of a local chapter of the society. Fraternal benefit societies have representative governments, and members share a religious, ethnic, vocational or other common bond.

Insurance products issued or offered by Thrivent Financial, the marketing name for Thrivent Financial for Lutherans, Appleton, WI. Not all products are available in all states. Products issued by Thrivent Financial are available to applicants who meet membership, insurability, U.S. citizenship and residency requirements. Securities and investment advisory services are offered through Thrivent Investment Management Inc., 625 Fourth Ave. S., Minneapolis, MN 55415, a FINRA and SIPC member and a wholly owned subsidiary of Thrivent. Thrivent Financial representatives are registered representatives of Thrivent Investment Management Inc. They are also licensed insurance agents/producers of Thrivent. Fee-based investment advisory services are available through qualified investment advisor representatives only.

Trust and investment management accounts and services offered by Thrivent Trust Company are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, nor guaranteed by Thrivent Trust Company or its affiliates, and are subject to investment risk, including possible loss of the principal amount invested.

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